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GOP, Obama move budget battle beyond 2012

By Associated Press

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WASHINGTON >> The House and Senate are ready to vote on legislation cutting almost $40 billion from the budget for the current year, but President Barack Obama and his GOP rivals are both eager to move on to multiyear fiscal plans that cut trillions instead of billions.

Lawmakers were to vote Thursday on a long-overdue spending measure funding the day-to-day budgets of federal agencies through September. Later in the day, Republicans dominating the House will launch debate on a 2012-and-beyond plan that promises to cut the long-term budget blueprint Obama laid out in February by more than $6 trillion.

Obama countered Wednesday with a new call to increase taxes on wealthier people and impose quicker cuts to Medicare, launching a roiling debate in Congress and the 2012 presidential campaign to come.

Obama fired a broadside at the long-term GOP plan, which calls for transforming the Medicare health program for the aged into a voucher-like system for people under the age of 55 and imposing stringent cuts on Medicaid, which provides health care to the poor and disabled, including people in nursing homes.

More immediate, however, is the 2011 spending measure. It combines more than $38 billion in cuts to domestic accounts with changes to benefit programs, like children's health care, that Congress' own economists say are illusory.

Thursday's measure is a compromise between Obama, GOP House Speaker John Boehner of Ohio and Democratic Senate Majority Leader Harry Reid of Nevada. As such, it's a split-the-differences compromise that considerably smooths a much more stringent version that passed the House in February.

The bill cuts $600 million from community health programs, $414 million from grants for state and local police departments, and $1.6 billion from the Environmental Protection Agency's budget. Community development block grants, a favorite with mayors of both political parties, take a $950 million cut. And construction and repair projects for federal buildings would absorb an almost $1 billion cut.

Obama, however, was able to ease cuts to favored programs like medical research, family planning programs and education, while largely ridding the bill of conservative policy initiatives to block last year's health care law and new environmental regulations.

But the measure would have little direct impact on the deficit through the Sept. 30 end of the fiscal year, according to the Congressional Budget Office, since about $8 billion in immediate domestic program cuts are more than outweighed by increases for the Pentagon and ongoing war costs.

Later Thursday, the GOP-dominated House will kick off debate on its long-term budget plan, a measure promising stiff cuts to domestic agency budgets that total $1.8 trillion over 10 years. The GOP measure, a non-binding blueprint that sets a theoretical framework for future legislation, would also sharply cut Medicaid and transform it into a block grant program runs by the states. It doesn't touch Social Security, however, or immediately cut Medicare.

But the GOP plan calls for transforming Medicare in the future by replacing the current system, in which the government directly pays doctor and hospital bills, into a voucher-like program in which future retirees purchase private insurance plans. People 55 and over would stay in the current system but younger people would receive the insurance subsidies, which economists say would gradually lose value over time because they wouldn't keep up with inflating costs of medical care.

Obama and Democrats say the GOP Medicare plan, devised by Budget Committee Chairman Paul Ryan, R-Wis., would "end Medicare as we know it."

On Wednesday, Obama said spending cuts and higher taxes alike must be part of any deficit-reduction plan, including an end to Bush-era tax cuts for the wealthy.

"We have to live within our means, reduce our deficit and get back on a path that will allow us to pay down our debt," the president said in a speech at George Washington University, a few blocks from the White House. "And we have to do it in a way that protects the recovery, and protects the investments we need to grow, create jobs and win the future."

Obama's speech was salted with calls for bipartisanship, but it also bristled with attacks on Republicans.

"What we got was a speech that was excessively partisan, dramatically inaccurate and hopelessly inadequate to addressing our country's pressing fiscal challenges," Ryan said. "What we heard today was not fiscal leadership from our commander in chief. What we heard today was a political broadside from our campaigner in chief."

Obama's plan relied on some of the same deficit-reduction measures proposed in December by a bipartisan fiscal commission he appointed. The president is scheduled to meet Thursday at the White House with the co-chairmen of the commission, Democrat Erskine Bowles and Republican Alan Simpson.






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